09 December 2014

Financial crime - Bribery Act

Bribery Act still a key focus of the SFO’s-perspective.aspx

A speech has been published by the Serious Fraud Office (SFO) whereby Stuart Alford QC, SFO Joint Head of Fraud, spoke on enforcement of the Bribery Act 2010.

Mr Alford addressed the question, we are frequently asked by our clients, as to why there have been no prosecutions under the Bribery Act and whether the SFO is taking the Act seriously.

The Bribery Act, Mr Alford explains, is not retrospective. Therefore, for conduct to be criminal, it must have been undertaken after 1 July 2011 and such conduct usually takes time to surface. In addition, SFO cases are, by definition, serious or complex and very often include international parties and conduct. As a result, these types of cases will take some time to move through the process of investigation and on to prosecution. Firms and individuals should therefore note that while no significant cases have yet been bought, the SFO are working on a number of investigations and will ensure that elements of the case are fully considered and relevant evidence collected before bringing charges.

Mr Alford pointed out that a SFO case is currently before a jury in Southwark Crown Court which includes charges under the Bribery Act as part of a wider fraud case, (the Sustainable Agroenergy Plc and Sustainable Wealth Investments UK Ltd ‘bio fuel’ case).

The speech serves as a reminder to firms and individuals that the Bribery Act is still very much at the forefront of the SFO’s priorities for prosecutions. Describing the Act as a piece of legislation that is taken ‘very seriously’, Mr Alfold advised that the public will start to see an increase in the number of prosecutions, both from the SFO and other agencies.

FCA – Financial crime risk still high for small banks

The FCA has found that many small banks and commercial insurance intermediaries are failing to effectively manage financial crime risk.

The FCA reviewed 21 banks and ten commercial insurance intermediaries and found:

  • there were significant and widespread weaknesses in most banks’ anti-money laundering systems and controls and in some banks’ sanctions controls, including inadequate resourcing, staff having weak knowledge of money laundering risks and some overseas banks struggling to align their group policies with the higher UK requirements
  • most intermediaries’ controls failed to manage bribery and corruption risk effectively. Often policies were too narrow and failed to take a view of all the risks associated with individual relationships. 

As a result, the FCA is proposing to update its regulatory guidance, ‘Financial crime: a guide for firms’ and will be providing firms with examples of good practice that it saw during its thematic reviews. It has also proposed to clarify its guidance in the areas where significant weaknesses persist. Small banks (and indeed other relevant firms) should use this update as an opportunity to get their internal anti-money laundering and anti-bribery and corruption, systems and controls into shape as this is an area of increased supervisory focus for the FCA.


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